Personal and Business Finance Notes
Personal Finance
Method of Communications with Customers (Advantages &
Disadvantage)
Postal Banking - A paper based financial transactions
Advantages
- Traditional method that some customers feel reassured by
- Does not require any technology or devices
Disadvantages
- Can be slow due to the reliance on the postal system
- Post can get lost
Branch - A physical place
Advantages
- Transactions can be carried out immediately
- Additional service
- E.G. Advice can be offered
Disadvantage
- Restricted to bank opening hours
- Long queues can make the process time consuming
Online Banking - The use of the internet to carry out banking transactions
Advantages
- Available 24/7
- High degree of privacy
Disadvantage
- Not suitable for cash withdrawals
- Increased risk due to cyber crime
Telephone Banking - Carry out banking transactions - automated service or
customer advisor
Advantages
- Convenient to access basic functions
- E.G checking your account balance
- No additional charge
Disadvantage
- Call centre and automated phone system can cause customer frustration
- Full access to services may be limited to certain hours
,Mobile Banking
Advantage
- Available 24/7
- Convenient to use, even on the move
Disadvantage
- May need to download specific apps to access mobile banking
- Higher security risk if mobile devices are lost or stolen
Financial Information and Guidance (Advantages & Disadvantages)
Citizen Advice - An organisation, run by charities, that offers advice
Advantages
- Advice can be accessed online and via email/phone in addition to visiting a
branch
- Free service
Disadvantages
- Trained volunteers are not necessarily specialist in financial issues therefore
knowledge may be limited
- May have to wait a long time to be seen by an advisor, which can be stressful
in difficult circumstances
Independent Financial Advisor (IFA) - Professionals who offer independent
advice
Advantages
- Advice is offered by professionals in the field
- Services offered are regulated by the Financial Conduct Authority (FCA) and
Financial Ombudsman Service (FOS)
Disadvantages
- Services used will be charges for
- Advice offered is not guaranteed to be 100% up to date or unbiased
Price Comparison Sites
Advantages
- Easy to access 24/7
- Free service
Disadvantages
- Will not cover all of the available options on the market
- Potential for bias
, Money Advice Service - A Government organisation set up to offer free and
impartial financial advice in the UK
Advantages
- Government funded, therefore advice is free and impartial
- Covers a wide range of financial matters that individuals may need support
with
Disadvantages
- Advice is only available online or over the phone - no face to face
communications
- Advice can be generic rather than general to personal circumstances
Debt Counsellors - A professional who offers advice on how to manage debt
Advantages
- Advice is offered by a professional who specialises in debt management
- Services are regulated by the FCA and FOS
Disadvantages
- Services will be charged for
- Advice will focus on debt management rather than the whole package of
financial concerns
Individual Voluntary Arrangements Bankruptcy (IVA’s) - A Government
organisation that allows someone to declare bankruptcy while agreeing to pay all or
part of the money they owe
Advantages
- Independent advice without bias
- Helps manage debt repayment with regular payments making budgeting
easier
Disadvantages
- Will impact on future credit ratings
- Set up and handling fees are charged for the service
Type of Saving and Investment (Advantages & Disadvantages)
Premium Bonds - Save up to a set amount. Not interest is earned but the bond is
placed into a regular draw for cash prizes
Advantages
- Can be easily withdrawn with no loss or penalty
- A chance to win substantially more than could be earned in interest
Disadvantages
- No guaranteed return on investment
- The amount invested, assuming zero or low returns, loses value due to
inflation
Personal Finance
Method of Communications with Customers (Advantages &
Disadvantage)
Postal Banking - A paper based financial transactions
Advantages
- Traditional method that some customers feel reassured by
- Does not require any technology or devices
Disadvantages
- Can be slow due to the reliance on the postal system
- Post can get lost
Branch - A physical place
Advantages
- Transactions can be carried out immediately
- Additional service
- E.G. Advice can be offered
Disadvantage
- Restricted to bank opening hours
- Long queues can make the process time consuming
Online Banking - The use of the internet to carry out banking transactions
Advantages
- Available 24/7
- High degree of privacy
Disadvantage
- Not suitable for cash withdrawals
- Increased risk due to cyber crime
Telephone Banking - Carry out banking transactions - automated service or
customer advisor
Advantages
- Convenient to access basic functions
- E.G checking your account balance
- No additional charge
Disadvantage
- Call centre and automated phone system can cause customer frustration
- Full access to services may be limited to certain hours
,Mobile Banking
Advantage
- Available 24/7
- Convenient to use, even on the move
Disadvantage
- May need to download specific apps to access mobile banking
- Higher security risk if mobile devices are lost or stolen
Financial Information and Guidance (Advantages & Disadvantages)
Citizen Advice - An organisation, run by charities, that offers advice
Advantages
- Advice can be accessed online and via email/phone in addition to visiting a
branch
- Free service
Disadvantages
- Trained volunteers are not necessarily specialist in financial issues therefore
knowledge may be limited
- May have to wait a long time to be seen by an advisor, which can be stressful
in difficult circumstances
Independent Financial Advisor (IFA) - Professionals who offer independent
advice
Advantages
- Advice is offered by professionals in the field
- Services offered are regulated by the Financial Conduct Authority (FCA) and
Financial Ombudsman Service (FOS)
Disadvantages
- Services used will be charges for
- Advice offered is not guaranteed to be 100% up to date or unbiased
Price Comparison Sites
Advantages
- Easy to access 24/7
- Free service
Disadvantages
- Will not cover all of the available options on the market
- Potential for bias
, Money Advice Service - A Government organisation set up to offer free and
impartial financial advice in the UK
Advantages
- Government funded, therefore advice is free and impartial
- Covers a wide range of financial matters that individuals may need support
with
Disadvantages
- Advice is only available online or over the phone - no face to face
communications
- Advice can be generic rather than general to personal circumstances
Debt Counsellors - A professional who offers advice on how to manage debt
Advantages
- Advice is offered by a professional who specialises in debt management
- Services are regulated by the FCA and FOS
Disadvantages
- Services will be charged for
- Advice will focus on debt management rather than the whole package of
financial concerns
Individual Voluntary Arrangements Bankruptcy (IVA’s) - A Government
organisation that allows someone to declare bankruptcy while agreeing to pay all or
part of the money they owe
Advantages
- Independent advice without bias
- Helps manage debt repayment with regular payments making budgeting
easier
Disadvantages
- Will impact on future credit ratings
- Set up and handling fees are charged for the service
Type of Saving and Investment (Advantages & Disadvantages)
Premium Bonds - Save up to a set amount. Not interest is earned but the bond is
placed into a regular draw for cash prizes
Advantages
- Can be easily withdrawn with no loss or penalty
- A chance to win substantially more than could be earned in interest
Disadvantages
- No guaranteed return on investment
- The amount invested, assuming zero or low returns, loses value due to
inflation
